The Civil Court in Cyprus awarded damages to a private company for the harm suffered due to an infringement of Competition Law. This is the first case concerning private damages actions adjudicated by Courts in Cyprus.
In particular, in Civil Action No. 2431/2013 issued on 9/2/2022, the Larnaca District Court (“Court”) awarded AGS Agrotrading Ltd (“AGS”) the total amount of €257.716,11 as compensation for damages suffered due to the abuse by the Cyprus Grain Commission (“CGC”) of its dominant position.
The CGC held a public monopoly position in the market of importing, trading and distributing all types of cereals in Cyprus until 2004. The market of cereals was subsequently liberalised following Cyprus’s accession to the European Union, and although new competitors had entered the market, the CGC had retained its dominant position.
According to the Cyprus Commission for the Protection of Competition (“CPC”) Decision No. 23/2013, the CGC had abused its dominant position by engaging in predatory pricing in relation to barley used for manufacturing animal feed. In particular, the CPC ruled that the CGC had imposed prices below the average variable cost during 2007 and 2008, and therefore those prices were per se anticompetitive.
Action for damages
AGS filed a follow-on action for damages before the Court for losses incurred due to the anti-competitive behaviour of the CGC arising from the abuse of its dominant position, as established in the CPC’s prohibition decision. The action concerned a compensation claim for profit loss during the period wherein CGC had engaged in predatory pricing. More specifically, AGS argued that as a result of the CGC’s conduct it was forced to sell barley at prices below its cost. Additionally, AGS argued that it had incurred a loss of sales.
The Court proceeded to examine whether AGS had indeed suffered losses resulting from the infringement of Competition Law by CGC in order to subsequently adjudicate the amount of damages that should be awarded in the case of an affirmative finding.
The Court based its findings concerning the above issues on the testimony provided by AGS’s Expert Witness, Dr. Panayiotis Agisilaou, Director of Trojan Economics and competition economist, who was accepted by the Court as a qualified expert to provide such testimony. Dr. Agisilaou proposed a methodology founded on counterfactual analysis, which entails comparing the actual situation of the undertaking following the infringement and the situation it would have been in had the infringement not occurred.
The methodology proposed by Dr. Agisilaou which was based on historical data was accepted by the Court as appropriate. Moreover, his calculation of the amount of damages to be awarded to AGS was accepted almost in its entirety, in contrast to the testimony provided by the Expert Witness brought on behalf of CGC, which was based on a different methodology that was ultimately not accepted by the Court as it was deemed to be unreliable.
This case represents an important development for the Cyprus case law, as it sets out the precedent for future cases regarding the claim of private damages for harm arising from infringement of Competition Law.